Two major battles for the coming season

Nothing about October recalls the happy days of summer filled with soccer victories and other joys. As the wiser among us expected, adjustment to harsher Greek realities has been rough, notwithstanding the smiling front that has been presented of late. Now, the broader political and economic landscape more resembles a storm-tossed sea. Because of the Cyprus issue and the Olympic Games, the government, and Prime Minister Costas Karamanlis himself, chose to proceed gently with administering the country’s affairs. The problems were so large and the responsibilities so great that no major upheavals could be risked. The government kept to this line until the end of August, hoping to be able to continue in the same vein, but events forced things along. Meanwhile many personalities from the previous government perceived this smooth transfer of power as a weakness, and as an opportunity to review roles and authority. When these events developed with an aggressive speed and the government began to feel the heat, it realized that it could not continue as it had been doing; and it understood that if it did not create its own reality, its own conditions, the game would be lost, and it would descend into a state of decay. So it went on the counteroffensive, feeling that it could not proceed if it did not rid itself of the burdens of the past. The (budgetary) deception was so clear, and the concealment of expenditures had been so brazen, that no reasonable government could ignore them. Initially it attempted to lay bare the fiscal problem, assuming the risk of possible pressure from the European Union. The fiscal inventory, which was clearly necessary considering the state of public finances, naturally produced a response from the European Union and did, in fact, put Greece in a difficult position. However, taking on any short-term cost was considered preferable to perpetuating a cover-up which would distort economic policy and put society on the wrong road. The government was not in a position to defend public finances with debts of 112.5 percent of the GDP and at the same time cultivate hopes based on an artificial reality. Perhaps it did not expect such violent reactions; perhaps it could have handled things better if the PASOK governments had used more transparent means of recording defense expenditures. But whatever the case, it assumed the cost and is now hoping for a new beginning, based on a clarification of the conditions for exercising economic policy, with a clear understanding of both obligations and possibilities. It chose the same route with regard to entrenched powers that did everything they could to preserve the status quo and obtain a commitment from the government. Everyone knows who the «main shareholders» are. A simple survey would suffice to show them up; then they themselves will be obliged to show that they are not what they seem, that they do not use the media to further their interests. Initially they used various means of approach, and when these did not succeed they began to exert pressure, exploiting the government’s less successful moves and its occasional failings. Tempted by the idea of taking the place of the hitherto apathetic main opposition party, they moved fast, forcing the government to change its stance into one of head-on conflict. The culmination came with the prime minister’s controversial references to «five pimps and five groups,» a comment which marked the beginning of a conflict which will not be restrained. According to all indications, the issue will become a directly politicized one. After all, there are many who support these interests, distributed right across the political landscape and encountered in all of the parties. Here, too, the prime minister has thrown down the gauntlet. It is therefore clear that Karamanlis, who always reminds his interlocutors that he perceives politics as a game of strategy and not as an administrative process, must now reap what he has sown. The battle for the economy, above all relations with the European Union, will be fought over the next 10 days. On October 20 and 21 ECOFIN will meet to evaluate the results of inspections to be carried out by a Eurostat team in Athens this week regarding Greece’s budget figures when it entered the Economic and Monetary Union. The next few days will call for delicate handling of the issue by the government, mainly regarding the inspection of data for the years before 2000. It is extremely important that no shadow be cast over Greece’s accession to the EMU, while a battle must be fought to defend the credibility of the new budget. As observed by the president of the Economic Experts’ Council, Plutarchos Sakellaris, at last Friday’s Monetary Commission meeting, the European Union officials are not in the best of moods and so great care will need to be taken; the figures will need to be convincing. Otherwise there could be problems, since it is on the basis of these inspections that the Council’s decision will be made on October 20 and later, in early November, the European Commission’s announcement regarding Greece’s economic adjustment. If the government is successful and the country escapes what could be a moral condemnation and punishment, then the government will have a freer hand to exercise its policies and set the economy on a new track. It also appears that the battle against entangled interests is also set to begin. By the time the budget is due for debate in mid-December, the controversial bills on the «main shareholder,» the media and radio and television frequencies, are also due to reach Parliament; that is, all those issues which will decide the outcome of conflicts with well-known business interests. It is clear that the expectation of these events alone will be igniting continual disputes and creating a hostile environment for the government, at least within a certain sector of the media. In the meantime, the government’s mettle will be tested, as will the way it, and above all the prime minister, imposes the conditions he has set. If he is able to control the government’s own internal forces who are ready to sell their souls for a few minutes of television time, then it will be able to achieve what its predecessors were unable to, and to enjoy an unprecedented freedom, redetermining the relationship between politics and business. The government has a unique opportunity to regain lost power and bring politics back to center stage. Whatever happens, much will be decided in the near future, even the government’s own future. Everything will depend on the nature of the new relationships with Brussels and on the outcome of conflict with entangled interests. They are major battles and will take place between October and November. If Karamanlis wins both, the game will be over not for just four but eight years.